(Note: Notice the players involved in this tangled web and the number of states that they admit to being involved in -- this is a huge business, and the 'sales pitches' are carefully orchestrated and worded. And! TNC even 'covets' this land -- they admit it!)

November 13, 2001

By Paula Tracy

Union Leader News

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LYME,  A 25-year-old Lyme company that invests in timberland and commercial real estate will own 3.6 percent of the state in 2002 if a complicated land sale goes forward as envisioned.

The Lyme Timber Co. will hold title to the International Paper Company lands -- the single largest tract of privately held real estate in the state -- under a plan now being put forward.

The Trust for Public Lands, which signed a purchase and sales agreement for the 171,500-acre tract with IP, selected the prospective buyer from a field of about a half-dozen timberland investment companies, said Erin Roland, spokesman for TPL.

Once conservation easements are secured on the land to forever preserve public access, about 150,000 acres in Pittsburg, Stewartstown and Clarksville will be sold to The Lyme Timber Co. for a price that looks to be in the neighborhood of $12 million to $15 million. The remaining land will be held by the state as natural areas, if the deal is completed.

"We requested bids from a number of interested timber buyers, and Lyme was compelling in their flexibility and commitment to the project," said Roland. "One of the criteria was price. We want to keep cost as low as possible. We also wanted a private buyer that has capacity and can perform within the time frame ... We needed a buyer who understood restrictions we were talking about and how that would translate into forest management.

"We wanted to find someone as local as possible," Roland added. "We are happy to be working with a company in New Hampshire where we thought they had the financial capacity to be a long-term owner."

So what is The Lyme Timber Co., and why is it interested in this land, which is so important to the North Country economy?

The privately held company is managed by Woodland Management Associates, which is the sole general partner of The Lyme Timber Company. The five partners are David M. Roby and Roy T. Van Vleck, both of Lyme, Stuart J. McCampbell and Peter R. Stein, both of Norwich, Vt., and David E. Clem of Hanover.

The five partners put up 28 percent of the capital to start the company, and 171 limited partners provided the balance. The limited partners are a mix of institutional investors, families and individuals.

The company's offices are on Lyme Green in an old farmhouse, with several aging barns on the property. Van Vleck and Clem founded the company after being at Wagner Woodlands in Lyme in 1976.

Lyme Timber specializes in long-term holdings in high-quality timberland across the nation and during the early 1990s owned as many as 250,000 acres. Over the last decade, the company has been selling its timberland holdings and is down to 35,000 acres, its lowest inventory ever, said Stein.

The timberland investments have been in Pennsylvania, Virginia, the Adirondacks of New York, North Carolina, West Virginia and Maine. The company has sold land in the past to TPL, the Nature Conservancy and others.

Stein said that about 80 percent of its holdings, however, are in commercial real estate in Cambridge, Mass. The company develops biotech complexes.

Although the company has sold more timberland than it has bought over the past six years, Stein said, he believes that is about to change because there are good land deals available, including the IP tract.

"We will be a net buyer" in the next five years, he predicted, specifically in New England, the mid-Atlantic and the upper Midwest.

The company bought 5,200 acres in the 13 Mile Woods area north of Berlin last year from Hancock Timber Resources. It also owns 300 acres in Croydon and is an adviser to Dartmouth College on some of the school's land.

Why the interest in the IP lands?

"We tend to feel we do well in complicated situations. It's fair to say the IP land is a complicated situation. The interest factor is there," Stein said.

It made sense that IP would sell the New Hampshire land because the company needs to raise $2 billion to satisfy investors after absorbing Champion International last year, he said. Also, Sens. Judd Gregg and Bob Smith, R-N.H., were in a position to get federal money for easements.

The gross timber value per acre in New Hampshire is low, and the land for sale in the state has been heavily logged, so the price is cheap compared with land in Western Pennsylvania, for example, where Cherry and Oak stands sell for $2,000 an acre, Stein said. In New England, with its significantly lower tree-growth rate, the highest price for land is about $450 an acre. Specific prices per acre have not been set yet for the IP land.

Stein was unsure what the management plan would look like and what the level of logging would be on the land once Lyme Timber took ownership. Over the last five years of Champion ownership, the yield from the property was $1.2 million to $1.5 million and the cut was close to the growth rate, Stein said.

For some time prior to that, Stein said, the trees were being cut two to three times faster than the forestland could be replenished by new growth.

"The land was not being cut for sustainability," he said.

There will probably be a detailed management plan set out by the state's Connecticut Lakes Headwaters Task Force, which will dictate how much The Lyme Timber Co. can cut. Stein said a five-year plan will be drawn up, which the public will get to examine before the deal goes through.

The company's financial success is not dependent on tree cutting, Stein said.

The great thing about trees, he said, is they continue to grow until the market determines a reasonable price.

"Our business strategy is to be patient," he said.

Stein said the company would like to have a subdivision option, not so it could sell to a developer but so it could sell to another timber company.

"We'd like to have that flexibility," he said; if Lyme Timber doesn't get it, the company would expect a lower selling price.

"This is an investment, and we need some liquidity," he said, hoping there was a chance to divide the tract into five pieces.

Stein said his company is excited about working with not only the Trust for Public Land but also with the collaborative partners, which are the Society for the Protection of New Hampshire Forests and the Nature Conservancy, and state and federal political leaders.

The deal may still fall through, but Stein said he hopes it does not.

"We covet this (deal), but we won't lose our minds over it," he said.

http://www.theunionleader.com/articles_show.html?article=6658